Customs By-law No. 2100221

EXPLANATORY STATEMENT

Customs By-law No. 2100221

Customs Act 1901

Authority

The Customs Act 1901 (the Customs Act) concerns customs-related functions and is the legislative authority that sets out the customs requirement for the importation of goods into, and the exportation of goods from, Australia.

Section 271 of the Customs Act provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Comptroller-General of Customs may make by-laws for the purposes of that item. A Customs Tariff is defined in subsection 4(1) of the Customs Act to mean an Act imposing duties of customs. The Customs Tariff Act 1995 (the Customs Tariff Act) is a Customs Tariff for the purposes of the Customs Act.

The Comptroller-General of Customs may specify in a by-law made for the purposes of an item, or a proposed item, of a Customs Tariff that is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law:

(a)         the goods, or the class or kind of goods, to which that item or proposed item applies;

(b)         the conditions, if any, subject to which that item or proposed item applies to those goods or to goods included in that class or kind of goods; and

(c)         such other matters as are necessary to determine the goods to which that item or proposed item applies.

Background

The Customs Tariff Amendment (2022 Harmonized System Changes) Act 2021 (the HS2022 Changes Act) amends the Customs Tariff Act to implement the outcome of the sixth review of the Harmonized Commodity Description and Coding System (the 2022 Harmonized System). In particular, under the changes made, tariff subheading 8701.20.00, applying to road tractors for semi-trailers, is superseded by new subheadings 8701.2 to 8701.29.00.

Schedule 4 to the Customs Tariff Act lists items where a concessional rate of customs duty is provided for particular goods. Item 38 in Schedule 4 of the Customs Tariff Act references a number of tariff subheadings in Chapter 87 of Schedule 3 to the Customs Tariff Act, including 8701.20.00, and provides that goods, as prescribed by by-law, which are components for use as original equipment in the assembly or manufacture of vehicles over 3.5 tonnes, are dutiable at the rate of “Free”.

Instrument

The Customs By-law No. 2100221 (the By-law) prescribes vehicle components for use as original equipment in the manufacture or assembly of the cab/chassis or drivable chassis of motor vehicles which:

a)      have a gross vehicle weight greater than 3.5 tonnes; and

b)     are classified under a heading or subheading listed in Table 1 in the By-law.

The by-law also prescribes vehicle components for use as original equipment in the assembly of motor vehicles which:

a)      have a gross vehicle weight between 3.5 tonnes and 4 tonnes; and

b)     are classified under a heading or subheading listed in Table 2 in the By-law.

A security must be lodged with the Department of Home Affairs to ensure compliance with the conditions set out in the by-law.

The purpose of the By-law is to prescribe the same range of goods previously prescribed by Customs By-law No. 1700051, but reflect the new tariff heading and subheadings under 2022 Harmonized System for which the goods are classified. The By-Law does not alter or changing existing arrangements, and has the effect of maintaining the range of goods that are dutiable at the rate of customs duty of “Free”.

Subsection 33(3) of the Acts Interpretation Act 1901 provides that, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. The By-Law repeals By-laws No. 1700051 and No. 1300584.

Consultation

The Australian Border Force represented Australia at the WCO during the sixth review of the Harmonized System and as part of this representation undertook targeted industry consultation. Several industries, including olive oil producers, Light‑Emitting Diodes manufacturers and a jewellers association requested changes. The ABF, working through the committees of the WCO, was able to achieve the requested outcomes which will be to the advantage of these industries. These specific outcomes are reflected in the overall outcome of the sixth review.

No further consultation was undertaken in the development of By-Law No as it does not alter existing arrangements and the same range of goods are provided for, albeit classified under new subheadings.

The Office of Best Practice Regulation (OBPR) has been consulted in relation to the implementation of the 2022 Harmonized System and has advised that the amendments are unlikely to have a more than minor regulatory impact and therefore a Regulation Impact Statement is not required. The OBPR reference number is 43800.

Commencement

The By-Law commences on 1 January 2022, which is the same time the amendments made by the HS2022 Changes Act is to commence.